SVB Financial Group Files for Chapter 11 Bankruptcy Protection to ‘Preserve’ Firm’s Value – Friday, SVB Financial Group sent out a press release that explained how it had asked for a reorganization to be overseen by the court under Chapter 11 bankruptcy protection. In the announcement, it was said that the filing was done to protect the company’s remaining value.
The bankruptcy filing does not include Silicon Valley Bank, N.A., which is a bridge bank run by the FDIC, SVB Securities, or the funds of SVB Capital. The three parts of the financial institution are still running the same way they did before the FDIC took over SVB.
People Also Read: Central Bank of Bolivia Selling Dollars Directly to Citizens as Devaluation Fears Rise
SVB Financial Group said that it has “about $2.2 billion in liquid assets” and has paid off “about $3.3 billion” in debt. According to the company’s explanation, the $3.7 billion of outstanding preferred equity will be used to look at strategic alternatives.
“The Chapter 11 process will allow SVB Financial Group to preserve value as it evaluates strategic alternatives for its prized businesses and assets, especially SVB Capital and SVB Securities,” the chief restructuring officer for SVB Financial Group, William Kosturos, said in a statement.
“SVB Capital and SVB Securities continue to operate and serve clients, led by their longstanding and independent leadership teams.” Kosturos continued: “SVB Financial Group will continue to work cooperatively with Silicon Valley Bridge Bank. We are committed to finding practical solutions to maximize the recoverable value for stakeholders of both entities.”
People Also Read: Silvergate Bank Announces Voluntary Liquidation as Crypto Industry Woes Persist
The filing for Chapter 11 came after news that Silicon Valley Bank CEO Greg Becker could be investigated for selling SVB shares worth $3 million before the bank failed. The Daily Mail said that after the bank failed, Becker and his wife flew first class to their home in Maui, Hawaii. Becker, who had worked at SVB for over 30 years, was fired by U.S. president Joe Biden when the FDIC took over, along with SVB’s top lieutenants.
